There's been lots of chatter over the past few days about how labor unions "are back" following the successful conclusion of the autoworkers strike. I hate to throw cold water on all this, but here's what UAW pay looks like next year, following the immediate 11% hike in the first year of the contract:
Autoworkers still won't be at the wage level of 2019.
There are strong points in the contract. The two-tier wage scale is basically gone. Future raises will include automatic COLA increases that prevent autoworkers from falling behind inflation. The weak bargaining of previous years was toughened up.
Still, this contract is basically just catching up with the unexpectedly high inflation of the past couple of years. That's why the topline number is so big. This, combined with strong economic growth and a tight labor market, made bargaining easier than in previous years. The strength of unions, unfortunately, is still about as weak as ever.
Automatic COLA is a giant very expensive win for the future. I was startled to see the companies agreed to it.
Yes, but does depend on how that is calculated and...it's in the future so staves off demands for more immediate increases now.
Yeah this basically ensure Tesla will win due to massively lower labor costs.
"Still, this contract is basically just catching up with the unexpectedly high inflation of the past couple of years."
C'mon, Kevin, that's about the worst use of the adverb "just" I've seen in a long time. Catching up, and having a contract that allows for keeping up, is a *giant* step for the union.
Historian Erik Loomis has pointed out that whenever there's a big, high-profile labor action (which doesn't even necessarily result in success), you get all the takes about how Labor Is Back and so forth. We're getting them now, we had them back in 2018 with the big teachers' strikes, and we even had them back in 2011 with the big teachers strike against Scott Walker in Wisconsin (that failed).
Each time it was wrong, and it might be wrong again - we're seeing some big high-profile labor victories among existing unions, but very limited victories among newly organized workers. The attempted unionization of Amazon warehouses stalled out after the first one, the Starbucks Union has slowed down its expansion and still doesn't have a contract, and the unionization of a handful of Trader Joes and REI stores has drastically slowed down.
But on the other hand, we do have a much stronger, pro-labor NLRB, and they're trying stuff like "if the election interference was super bad, the NLRB can order the election put aside and require bargaining." It will get challenged in the courts, but still better than nothing.
Never ask a former exec about unions. unless you want to hear exactly what you expect to hear.
Yes, unions are in terrible shape. But it is blindingly obvious that they are not "as weak as ever", otherwise they never would have won this round. The automakers got shellacked in this negotiation.
There are other little details like an upswing of public support, a President walking the picket line, SAG-AFRA, service industries attempting to unionize... But those aren't hard numbers, just "marketing and goodwill", which any good marketing exec will tell you is useless trash, of course... I'll stop now.
Kevin gets a lot right. But don't ask him about unions unless you're setting up a gag.
Like!
I agree with Ken Rhodes.
I'm okay financially, but somehow really good performance reviews over the last few years resulted in no raises in 2020 and 2021, and total raises since then that leave me around 17% behind where I was in 2019 when adjusted for inflation. Perhaps my age is responsible; my next career move is retirement. Still, my much younger boss said he was in the same situation.
Covid seems to have provided excuses to do a bit of employee screwing where the employers could get away with it. It's nothing new. For the last 50 years, keeping up with inflation has been a triumph for those in the bottom 90% who managed to do it.
Boy, this union contract certainly doesnt look like a big deal if you basically just ignore the biggest parts of the contract!
Great insight!
15% additional raise plus COLA raises , more employees will be at the top wage, more plants will be covered by union workers and on and on.....but those are basically just not worth mentioning.
Insightful!
Whether or not labor is back, we'll remember this strike as a workers' victory because the workers fought back.
Garbage take.
why use the top wage rather than average worker raise? seems like a bit of cherry picking.
Or maybe the median wage?
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